Head of Saudi Electric Company Says "Oil Runs Out in 2030 if Current Consumption Maintained"  

Posted by Big Gav in ,

Mish at Global Economic Trend Analysis has a look at a Saudi report that rising oil consumption for power generation may lead to their oil running out by 2030 - Head of Saudi Electric Company Says "Oil Runs Out in 2030 if Current Consumption Maintained".

In light of Saudi Arabia wanting to step up production only to be rebuffed by the rest of OPEC, this story from elEconomista.es is rather interesting.

Courtesy of Google Translate please consider Saudi Arabia fears that the oil runs out in 2030 if current consumption is maintained

Note: I am rewording some awkward translations so they read better.
The electricity company of Saudi Arabia warns that oil in this country could be depleted by 2030 if left unchecked domestic consumption. According to a report of Saudi Electric, domestic consumption is estimated to be between 2.5 and 3.4 million barrels a day.

The report, published in the magazine Al Mashka says that the increase in domestic consumption of oil is one of the main challenges facing the country, mainly because oil accounts for 80% of national income.

Abdel Salam al-Yamani, head of the Saudi Electricity Company also warned of the consequences for citizens to ignore the calls to save electricity and water, and has advised that they depend more on solar energy.

Stuart at Early Warning has a jaundiced look at the recent Saudi announcement that they can (and want to) increase oil production to - Saudi Arabia to Produce 10mbd in July? .
At the end of April, I noted this WSJ quote:
Saudi Oil Minister Ali Al-Naimi said Sunday that oil production from the kingdom was 8.292 million barrels per day in March, down about 800,000 barrels a day from 9.125 million barrels per day in February. Most estimates, including the monthly report of OPEC—which relies on external databases—had seen a rising or stable production at about nine million barrels a day in March.

Ok. So here we have the Wall St Journal - premier business newspaper in the world - quoting the Oil Minister of Saudi Arabia, as to the level of Saudi oil production. With three decimal places, four significant figures, no less.

You ought to be able to rely on that, right? Mr al-Naimi must know how much oil his fully nationalized oil industry produces. And the Wall St Journal surely wouldn't make an error in reporting his words. And even if you didn't believe the Murdoch-owned conservative WSJ, you have the left-leaning SF Chronicle reporting the same thing. And clearly, if they are giving three decimal places, it's not some off-the-cuff remark. He must have spoken with some precision from notes, or given a printed handout or the like, to mention both months with four significant figures each. So it must be true, right? ...

So, the Kingdom of Saudi Arabia reported to the Joint Oil Data Initiative that it produced 9.020mb/d in February, and 8.655mb/d in March, a fall of 365kb/d. This is in sharp contrast to Mr al-Naimi's statement that the Kingdom's production dropped by 833kb/d between February and March.

So what is one to conclude? When the Saudi oil minister speaks to the world's business reporters, one cannot rely that his words will later match the kingdom's official reports to international statistical agencies. Whether through sloppiness or otherwise, at least one of Mr al-Naimi's statement and the Saudi report were in error to the tune of almost half a million barrels a day -- more than five percent of production -- at a time when oil markets are critically seeking signals of Saudi intentions and capabilities. ...

If the plain words of the oil minister cannot be relied on, are anonymous sources quoted in the Saudi press to be relied on a-fortiori? And when did Saudi Arabia pay much attention to its quota? And if it was willing and able to increase production to 10mbd, why not do it in March, when Libya went off line? I note that there is rather a history of what appear to be Saudi public relations exercises that get repeated by gullible journalists. By the time the statistics come out a month or two later, they will have forgotten all about it and will never correct the record. Just like they never corrected the record for what Mr al-Naimi said about March production, and before that, very few corrected the earlier press reports that Saudi Arabia had increased oil production to compensate for Libyan losses.

So I guess I'll reserve judgement on that 10mbd until we have all the international agencies publishing numbers that say it really happened.


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